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LONDON (Reuters) - World shares hit their highest level in a week on Friday and bonds and oil rose, as a volatile quarter drew to a close with fears of an early withdrawal of U.S. monetary stimulus waning.
Better economic data from Japan and efforts by China's central bank to ease credit concerns added to the positive tone, lifting MSCI's world equity index .MIWD00000PUS 0.5 percent and putting it on course to snap five weeks of losses.
U.S. stock index futures were higher as well, pointing to a firmer start on Wall Street where the benchmark S&P 500 index .SPX could see its first four-day gain since early April. .N
Market moves were likely to be limited, however, as investors avoid any large bets on the final trading day of the second quarter, and ponder the impact of an end to the era of cheap money which drove returns in the first half of 2013.
"It's been a tough quarter, the easy game is up and markets have to revaluate where they stand," said Wouter Sturkenboom, Investment Strategist at Russell Investments.
Global stock, bond and commodity markets have been highly volatile since Federal Reserve Chairman Ben Bernanke signaled last week that the U.S. central bank would soon cut the pace of its bond buying unless the economic recovery slows.
Two Fed policymakers came out on Thursday to reassure investors that any winding down of stimulus was still some way off, though its ultimate course was set. <FED/>
"The market is going to have to base its views about equities and currencies on actual economic growth rather than simply the fact that there's cheap money there," said Simon Derrick, chief currency strategist at Bank of New York Mellon.
"I think that's a fundamental shift."
A survey of 53 investors across the United States, Europe and Japan by Reuters, released on Friday, found that funds had already cut their average equity holdings in June to a nine-month low due to the recent volatility, and had held more cash.
Meanwhile, gold, which had soared in value as a hedge against higher inflation from all the cheap Fed money, has suffered heavily. The metal dropped to a three-year low near $1,200 an ounce on Friday, putting it on course for its worst quarterly performance in over half a century.
The end-of-quarter maneuvering was cited behind a rise in the euro off a four-week low against the dollar to $1.3080, and helped the dollar rise against the yen by 0.6 percent at 98.90 yen.
The broad FTSE Eurofirst 300 index .FTEU3, which had opened higher in line with other world markets, pared its gains as end of quarter positioning took hold. It slid 0.5 percent and was on course to end June lower after a record 12 monthly rises.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 1.5 percent, pulling further away from an 11-month low and wiping out this week's losses. It was still down around 7 percent for the year.
Asia's rise followed Wall Street's rally on the Fed comments and Japanese data showing consumer prices stopped falling in May and labor demand reached a five-year high.
China's stock markets had also seen their biggest gains in two months after its central bank, which had let short-term borrowing costs spike to record highs, said it would ensure its policy supported a slowing economy.
European bonds shared in the more positive tone, with yields falling on core German debt and riskier Spanish and Italian paper.
But Patrick Jacq, European rate strategist at BNP Paribas, said investors would require higher yields in future in light of the Fed's policy shift. "Liquidity and credit risk assessment has changed since the Fed spoke about tapering off," he said.
Brent crude oil futures climbed 29 cents to $103.11, on course for their first monthly rise in five months <O/R>. Copper was flat but facing its biggest quarterly loss in almost two years, reflecting global growth concerns.
Additional reporting by Ana Nicolaci da Costa; Editing by Catherine Evans